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ASSESSING CONSUMERS’ WILLINGNESS TO PAY FOR DIFFERENT UNITS OF ORGANIC MILK: EVIDENCE FROM MULTI-UNIT AUCTIONS

Faical Akaichi, Jose Maria Gil and Rodolfo Nayga

No 60982, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: Experimental auctions are normally conducted using single-unit auctions. In this paper, we explore the use of multi-unit auctions to investigate the determinants of consumers’ willingness to pay (WTP) for a food product (i.e., organic milk) in a multi-unit shopping scenario. We also analyze the effect of positive and negative information about organic farming on WTP. Our results suggest that although consumers are willing to pay for organic milk, their WTP decreases with the number of purchased units. We also found that the magnitude and the statistical significance of the determinants of WTP change from one unit to another. The most important factors affecting WTP are the number of units subjects are willing to buy, health concerns, and perceived animal welfare benefits of organic production. The type of information provided also plays a relevant role. Specifically, we find that positive information on organic farming increases WTP, negative information decreases WTP, and provision of both positive and negative information does not affect WTP.

Keywords: Agribusiness; Consumer/Household Economics; Demand and Price Analysis; Marketing; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Date: 2009
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http://ageconsearch.umn.edu/record/60982/files/WTP-Organic-Milk.pdf (application/pdf)

Related works:
Journal Article: Assessing Consumers’ Willingness to Pay for Different Units of Organic Milk: Evidence from Multiunit Auctions (2012) Downloads
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